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FTSE lower after US stocks hand back gains

by LLB Reporter
11th Aug 23 10:18 am

After another positive surprise on US inflation, stocks were all set to stage another rally before the head of the San Francisco Federal Reserve Bank intervened to dampen hopes of a shift in the trajectory of rates.

That dragged US stocks down from their highs and set the scene for a weak open for European stocks.

AJ Bell investment director Russ Mould said: “The FTSE 100 was also affected by a strong pound, after better-than expected figures on the UK economy, and weak resources stocks after a tough week for China marked by deflation, falling producer prices and soft trade figures as well as a sorry showing for Chinese equities. As the world’s most rapacious consumer of commodities, the fortunes of the Chinese economy are closely tied to these markets.

“Later today factory gate prices are out in the US, another reading which suggests inflationary pressures are easing could lift sentiment.

“This data set is something of a crystal ball for consumer price inflation; when producers charge more for goods the higher costs are usually passed on to households.”

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